Question

You have been asked to calculate the Cost Performance Index for a project using earned value management techniques. It is currently day 20 of the project and the following summarizes _____.

Answer 1

The Cost Performance Index (CPI) is a measure used in earned value management to assess the cost efficiency of a project. It is calculated by dividing the earned value (EV) by the actual cost (AC).

Step-by-step explanation:

The Cost Performance Index (CPI) is a measure used in earned value management to assess the cost efficiency of a project. It is calculated by dividing the earned value (EV) by the actual cost (AC). The formula for CPI is: CPI = EV / AC.

If you have the earned value and actual cost data for your project, you can plug them into the formula to calculate the CPI. For example, if the project has earned value of $10,000 and the actual cost is $12,000, the CPI would be 10,000 / 12,000 = 0.83.

The CPI value is an indicator of whether a project is under budget, on budget, or over budget. A CPI greater than 1 indicates that the project is under budget, a CPI equal to 1 indicates that the project is on budget, and a CPI less than 1 indicates that the project is over budget.